Exclusive: How a clash of visions led to Olu Akanmu’s exit from Opay
Olu Akanmu, OPay’s former president and co-CEO, exit underscores the potential tensions between financial goals and brand perception in fintech companies. On July 31, 2023, Olu Akanmu, former co-CEO of Opay, stepped down after almost two years at the Chinese-owned fintech; his exit surprised many, given Opay’s impressive growth under his leadership. A clash of vision between the former banker and the rest of the company’s leadership led to Akanmu’s departure, one person with knowledge of Opay’s business told TechCabal. “The Chinese cared about numbers much more than the brand’s perception,” that person told TechCabal. Opay operates a co-CEO structure, giving Olu Akanmu and a co-CEO internal sources identified as Steven dual leadership. According to those people, Steven was generally in charge of the policy at the fintech. Akanmu’s background in retail banking at FCMB, a Nigerian bank with a market capitalisation of ₦217 billion, positioned him to develop Opay’s merchant business, including POS, agency banking, and wallets. Despite this focus, internal sources said his co-CEO, Steven, had greater control over Opay’s direction. Several of Akanmu’s proposed initiatives, such as a payment gateway and a “payme” account for one-time payments, were reportedly shelved. Additionally, his commitment to social responsibility projects like financial inclusion for women and partnerships with internally displaced persons (IDPs) seemed at odds with the Chinese investors’ laser focus on numbers. Akanmu’s exit underscores the potential tensions between financial goals and brand perception in fintech companies. Opay did not answer any of TechCabal’s questions at the time of this report. During Akanmu’s time at Opay, the fintech grew exponentially, reaching over 30 million users, 500,000 agents, and 100,000 merchants, according to publicly released figures. The fintech previously offered a super app model, offering food delivery, ride-hailing, logistics, and payment services, before solely focusing on financial services in 2020. The fintech also proved to be a formidable alternative to legacy banks during Nigeria’s botched currency redesign, which led to a cash crunch. The fintech’s robust infrastructure and effective distribution strategies were deeply attributed to this win. New Leadership and regulatory hurdles Following Akanmu’s departure, Daudu Gotring, a former director at the Central Bank of Nigeria (CBN), became CEO. This appointment signaled Opay’s attempt to navigate increased regulatory scrutiny surrounding its Know Your Customer (KYC) measures. OPay faces scrutiny over weak KYC system: impersonation, account tiers raise red flags Opay faced increasing regulatory scrutiny over its Know Your Customer (KYC) processes last year, after allegations that it opened accounts for users without consent. The fintech, alongside other neobanks, had simplified user registration to attract unbanked customers, sometimes omitting strict identity verification for basic accounts account types with limited features. Bad actors have exploited this lax KYC approach to perpetrate fraud. TechCabal reported in October that Fidelity Bank, a Nigerian commercial bank, blocked transfers to OPay and other neobanks over concerns that their lax KYC processes are leading to increased fraud cases.
Read MoreNigeria’s inflation hits 28.92% as food costs soar
In December 2023, the purchasing power of Nigerian households was squeezed even more as consumer prices rose throughout 2023, increasing the possibility that the country’s central bank would raise interest rates. Official data from the National Bureau of Statistics (NBS) showed that headline inflation, which tracks the prices of food, energy and other commodities, rose to 28.92%. December’s inflation figure is lower than KPMG’s prediction of 30%. The major driver of Nigeria’s inflation is food, and prices of staples like bread and yam rose as many shoppers in the country struggled to afford their proteins during the festive period. December’s food inflation figure was 33.93%. Nigerian consumers feel the pinch as inflation hits 28.20%, food costs bite “The government has to start doing something with respect to the price of fuel and energy, including electricity, and improving the exchange rate depreciation situation,” said Sheriffdeen Tella, a professor of Economics at Olabisi Onabanjo University. “Once those things are done, we will start getting reduced inflation.” Last week, the World Bank projected Nigeria’s inflation to ease in 2024, hinged on last year’s reforms and the expectation of the easing of the effects of petroleum subsidy removal. However, other analysts are not optimistic that inflation will slow any time soon. The Central Bank Governor, Yemi Cardoso, dismissed the effect of rate hike meetings on curbing inflation at his last public outing. These attitudes show that the January 2024 headline inflation figure could go
Read More
Next Wave: Local tech IPOs are not the answer… yet
Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner Join us for TechCabal Battlefield, Moonshot’s startup competition where you can showcase your startup idea to a global audience and an esteemed panel of judges and stand a chance to win up to 2.5 million naira in funding for your business! Click to register for TC Battlefield First published 14 January, 2024 African stock exchanges, big or small, have the opportunity to build a robust equity capital market ecosystem. That should take priority over asking tech giants to IPO locally. Last week’s Next Wave asked whether Nigerian tech startups should consider listing on the stock exchange if a planned tech board within the country’s stock exchange goes live. TechCabal’s Ganiu Oloruntade followed that essay up with an exclusive where the CEO of the Nigerian stock exchange disclosed that the exchange is in talks with startups who he hopes will go ahead to list on the tech board this year. I think that’s incredibly optimistic, which is not a bad thing, but other than a listing from an older tech group like Interswitch whose London IPO plans have been pushed back repeatedly for several years, I struggle to see who else could conceivably want to go public in Nigeria. I also struggle to see the same enthusiasm for local listings by startups anywhere else on the continent. Several of the most well-funded and more mature companies in any of the big four recipients of venture capital in Africa are only just recovering from the hangover of last year’s brutal operating environment. A few may unfortunately not survive it. And the more mature companies in smaller markets, like Wave whose key markets are Senegal and Cote d’Ivoire, are simply too big1 , for the regional Bourse Régionale des Valeurs Mobilières (BRVM). That leaves the younger early-stage startups that have barely begun to generate revenue as improbable candidates. Think about it for a moment. What African tech startup would you be excited to buy shares in if it decides to list publicly on any African stock exchange this year? The way I see it, focusing on getting the current crop of startups to list in any of the continent’s stock exchanges is a strategic misstep. It is not necessarily bad, but it is a step too early for a continent where an ungodly bulk of the capital financing that helps these startups get started is still foreign and flighty. Lightening public listing rules by creating a junior public market (like Nigeria’s tech board) for startups can be a mixed bag in terms especially if the goal is to simply get them to list, according to this 2019 paper in the Journal of Innovation Economics and Management. Africa’s software companies of today are still pretty much strangers to the institutional capital establishment on the continent. A campaign to get startups to list might help stock exchanges get additional revenue, but it will do precious little to close the gap between local institutional finance and software ventures in Africa. Instead of focusing on creating a pipeline of tech company IPOs by simply creating a tech board, stock exchanges could achieve the same goals by working to connect local institutional capital with startups by building a more robust equity capital market ecosystem. An alternative approach Equity capital markets is a catch-all term for the financial space where companies raise capital from share sales privately and publicly. For the purpose of this conversation, let us imagine a new hybrid equity capital market that includes debt capital. In this imaginary scenario, stock exchanges that wish to see more software companies listed on their trading boards will play an active role in helping coordinate the broader market for capital raising. Specifically, they will help companies and institutional investors build a robust private placement market where companies can raise capital by directly selling to local accredited investors, with the exchange as a mediator and due diligence partner. Do you have a message for Africa’s tech leaders, policymakers or the leading workers building the continent’s startups? Talk to us to find out how we can help share your message on this newsletter. Email bizdev@bigcabal.com to start. Send an email. To put this another way, I believe that the road to publicly listed tech companies will be built on top of a robust private placement market that affords institutional fund managers in key African economies the opportunity to own part of nationally (or even globally) relevant software companies that are created in Africa. This is an arena where tech policymakers in the big economies which attract the most venture capital can focus on gaining even more strategic advantage. I hope someone from CORBEH, the digital sandbox of the EGX is reading this. It’s a no-brainer. And if they are too slow, it is also a sound strategy for tech-hub wannabe countries who have small economies but lofty financial centre dreams. Hello Rwanda, Mauritius, Namibia? The paper I mentioned earlier demonstrates that a compromise can be worked out where junior stock exchange boards are constructed on top of a busy private placement environment. Nothing can replace the trust of local institutional capital When Egypt’s Fawry offered retail investors 5% of shares in 2019, it got oversubscribed, i.e. it received 30 times more applications for shares than it had offered. When Kenya’s government sold part of its stake in Safaricom on the Nairobi Stock Exchange in 2008, the 896,213 new brokerage accounts opened by retail investors more than doubled the number of individual investors registered at the stock exchange up to that point. The retail offering of the IPO was oversubscribed by 4.64 times. When MTN Nigeria offered some 3.2% of its shares in 2021, it hoped to attract 2 million retail investors. But only 126,720 retail investors were enough to buy up the 575 million shares on offer which were oversubscribed by 1.39 times. Two things are common with these three IPO examples. The first is that these companies
Read MoreShowmax reboots with mobile-first focus, Premier League plan at ₦2,900
Showmax, the streaming video-on-demand service owned by MultiChoice, is betting on affordable pricing and a mobile-first focus to drive subscriptions ahead of the February launch of Showmax 2.0, the second iteration of its streaming service. At a presser held in Lagos on Monday morning, the company shared an advance view of the app, its new brand identity and subscription tiers with a room filled with around 50 content creators, journalists and film stars. Showmax 2.0, which represents one of the company’s most significant investments for the future, has three subscription tiers: entertainment, Premier League and a bundle subscription of entertainment and the Premier League. The mobile-only subscription for the Premier League, an incredibly popular sporting offering in Africa, will cost ₦2,900, ten times cheaper than the premium subscription for DStv, its cable TV offering. A mobile-only entertainment subscription will cost ₦2,500 a month, while a mobile bundle of entertainment and the Premier League will only cost ₦3,200. “Nobody understands this market like we do,” said Arinola Shobande, the marketing manager of Showmax, referring not only to the product’s pricing but the “data economy” built into it. “You can watch Showmax for 24 hours for just 1GB of data,” Arinola added, addressing one of the biggest obstacles to streaming on the African continent. MultiChoice invests a further $27 million into Showmax relaunch Given its extensive investment into Showmax, MultiChoice is targeting 50 million subscribers in the next five years. In March, it inked a partnership with NBCUniversal, and the new app will use NBCU’s Peacock technology platform. The company will pay R247 million (~$13 million) to license that technology for seven years and give NBCU a 30% stake in a new holding group. Exclusive: IROKOtv’s user numbers show Africa’s oldest streamer is behind competition The relaunch of Showmax coincides with increasing competition in Africa’s SVOD sector. Foreign players like Netflix and Amazon Prime are increasing their spend on the continent, partnering with local studios to churn out original content. Yet, Multichoice will be buoyed by two considerations. First, a recent research from Omdia Research, a tech research firm, showed that Showmax is Africa’s video streaming market leader with 1.8 million subscribers. The second is its library of original content, which is likely the largest in Africa. With popular entertainment offerings like Big Brother Nigeria and original shows like Wura, the company believes that nobody understands the market as it does. In 2024, it will launch 21 new originals as it prepares for a February 23 launch. The new app will be available for download by January 23.
Read More
👨🏿🚀TC Daily – Woven knits itself back together
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Sup’ This week, you can stay smarter and step ahead of everyone by signing up to receive breaking news from TechCabal. In today’s edition Lyca Mobile shuts down in South Africa Citigroup to lay off 20,000 employees Woven refutes shutdown The future of EV in Africa Stat of the week The World Wide Web3 Job Openings Telecoms Lyca Mobile shuts down in South Africa GIF source: Tenor South Africa is seeing another multinational exit with network operator Lyca Mobile’s shutdown. The news: Last week, the mobile virtual network operator (MVNO) stated that it’s cutting ties in SA. Users had until January 9, 2024, to hop onto another network or face the risk of losing their phone number and access to text, call and data services. The reason: Lyca’s announcement didn’t say much, but the company’s long-time partner Cell-C is facing significant financial challenges. Lyca launched in SA in 2017 thanks to a partnership with Cell-C. As an MVNO, Lyca uses other telecoms’ physical infrastructure—in this case, Cell-C’s. Cell-C, however, has lost 9 million customers between 2021 and 2013, and has a R10.7 billion debt ($576 million). Some analysts deem the company technically insolvent. South Africa is expensive for telecoms: South Africa’s load shedding is also leaving businesses blind. The country’s continuing declining electricity supply forced MTN to spend an extra $84 million on power supply and security last year. Vodacom has spent at least R4 billion ($218 million) on generators since 2020, and Telkom says it spent R655 million (35.2 million) on diesel and batteries in 2023 alone. While Lyca didn’t have to deal directly with these as an MVNO, its partner certainly did as Blue Label, Cell-C’s parent company, also reported profit declines due to load shedding. Meanwhile, Lyca is still active in Tunisia and Uganda where, in October 2023, it refuted rumours of a shutdown. Around the same time, it also suffered a hack that disrupted services for its 16 million customers across the world. Lyca is the second MVNO to exit South Africa in three years; the first was Virgin Mobile which exited the country in 2021 after succumbing to financial hurdles. Access payments with Moniepoint Moniepoint has made it simple for your business to access payments while providing access to credit and other business tools. Open an account today here. Layoffs Citigroup to lay off 20,000 employees In what is the biggest layoffs of 2024 so far, global investment bank Citigroup has announced that it will cut 10% of its workforce, about 20,000 jobs, by 2026. A tough quarter = tough decisions: According to chief financial officer Mark Mason, the layoffs are part of the company’s reorganisation and bid to boost its bank results. The company has had four rough quarters culminating in Q4 2024 when it recorded $1.8 billion in losses, the biggest losses recorded since 2009 when it recorded $8.9 billion in losses in its fourth quarter. At the time, the company was recovering from a humbling financial crisis that saw 73,000 jobs cut in 2008 due to a $20 billion loss. To recoup some of its 2008 losses, the company sold off some of its business arms and raised $9 billion in the process. History repeats itself: Citigroup is playing the same card. The bank has sold some of its operations outside the US including its China consumer unit, its Vietnam business unit, and several other businesses across South East Asia. In Mexico, failed efforts to sell its consumer unit Banamex have led the company to list it as a standalone firm in pursuit of a 2025 IPO listing. Startups Woven denies shutdown news GIF Source: YungNollywood A surprising turn of events has Nigerian fintech Woven has retracted its shutdown announcement. In an email shared with customers last Wednesday, the company had announced an imminent shutdown. “After a thorough analysis of the current market dynamics and their impact on our business model, Woven Finance has resolved to cease its payment services operations in the first quarter of 2024,” the email read. And now? Woven says the email was sent in error. In a call with TechCabal, a highly-placed source said the email was unauthorised. The company also backtracked on its service transfer to Hydrogen. Woven says it will continue to operate until its board or shareholders decide to cut the wool. Woven acquired a PSSP licence in 2022, and this could mean the company is exploring new avenues for their operations without abandoning existing services. Zoom out: The incident exposes communication problems at Woven. While the company promises to send updates, mixed messages won’t reassure customers and could spark a bank run if there isn’t one already. Secure payment gateway for your business Fincra payment gateway enables you to easily collect Naira payments as a business; you can collect payments in minutes through cards, bank transfers and PayAttitude. Create a free account and start collecting NGN payments with Fincra. TC Insights The future of EVs in Africa Electric mobility in Africa is still in its development stage. Although the sales of electric vehicles (EVs) on the continent have increased in recent years, they have remained the lowest worldwide. For instance, South Africa is the continent’s largest e-mobility market, yet electric vehicles account for 0.05% of the total 12 million automobiles in the country at 1,000 EVs as of 2022. While these electric vehicles offer cost-effective and environmentally friendly alternatives, their path to widespread adoption is faced with controversy and challenges. Image Source: TechCabal Insights The chart shows that the projected stock of electric vehicles (EVs) in sub-Saharan Africa by 2040 is expected to be 13.5 million in the base case and 25 million in the accelerated case. The base case assumes that current trends continue, while the accelerated case assumes that there are significant policy interventions to accelerate the transition to EVs. As the majority of EVs in sub-Saharan Africa are expected to be two-wheelers, this also makes
Read MoreWoven Finance fumble: startup denies shutdown after erroneous email
Woven Finance, the Coronation Group-backed fintech startup, has denied shutting down, claiming that an email sent to customers on Wednesday morning informing them of a shutdown was sent in error. “The email was unauthorised and was immediately recalled,” a highly-placed person at the company told TechCabal. “After a thorough analysis of the current market dynamics and their impact on our business model, Woven Finance has resolved to cease its payment services operations in the first quarter of 2024,” part of the company’s Wednesday email said. The company also denied a crucial detail in the email where it told customers that it would transfer its services to Hydrogen, a fintech owned by the Access Group. “There are no plans to transfer any service,” the same source said, perhaps referring to the Payment Solution Service Providers (PSSP) licence it received in 2022. The fintech told TechCabal that it would send communication clarifying the error and that it continues to operate until shareholders and the company’s board decide otherwise. Woven Finance is backed by Trium, the venture arm of the Coronation Group, which includes companies like Coronation Merchant Bank and Coronation Insurance (formerly WAPIC). *This is a developing story
Read MoreExclusive: How Africa-focused VCs are turning to secondary markets for liquidity lifelines
Africa’s venture funding boom between 2020 and 2022 gave birth to a bustling market for secondary sales of startup shares. It made early investors, founders and employees wealthy as one VC firm was able to return its entire first fund, worth $5 million, through a secondary sale. But as big-ticket investments slow to a trickle, it is getting harder to find buyers. Africa’s startup ecosystem has long faced an exit problem. According to The Big Deal, a comprehensive database of startup funding in Africa, there have been 2,971 venture deals since 2019, but only 143 exits (4.8%). This includes initial public offerings (IPOs), mergers and acquisitions. Faced with limited opportunities to recoup their investment, investors in Africa’s tech ecosystem have turned to secondary share sales to collect profits. Secondary transactions refer to when employees or investors in a company sell their existing shares to another investor. In September 2023, an early retail investor in Flutterwave was looking to sell 50,000 shares at a $3.75 million price tag, a person familiar with those conversations told TechCabal. This was barely one month after Flutterwave’s CEO, Olugbenga Agboola, told Bloomberg that his firm would go ahead with its IPO plans. “Angels love secondary exits,” Joe Kinvi, partner at Hoaq, an angel investing community, told TechCabal, “Funds, not so much because they need to return the fund and selling out early might not return the fund.” However, African VC firms are not averse to selling when the opportunity arises. One early-stage pan-African VC firm returned its first fund, a $5 million micro-fund, after it sold part of its Moniepoint shares in a secondary transaction, three people familiar with the sale told TechCabal. In a few cases where VC firms delayed participating in secondary transactions when the opportunity arose, they sometimes lost it all. One such case is 54Gene, the now-defunct genomics startup. Investors in the company were offered an opportunity to participate in a secondary share sale at a $100 million valuation, according to three people familiar with the matter. Two people said most investors passed up on the opportunity, and 54Gene would later shut down in a cloud of controversy after raising $45 million. Syndicates and micro-funds are big winners Angel investor syndicates and micro-funds have been the biggest beneficiaries of secondary market transactions. The funding boom of 2021 and 2022 was a boon for these early investors who sold shares in companies they had invested early in to newer (and typically) desperate investors looking to get into “hot” startups. Startup founders and employees have also benefited from selling parts of their shares in secondary market transactions. “Employees of high-growth tech companies have, on average, reached the end of their stock options vesting period and are now open to liquidity,” said Jude Dike, the CEO of GetEquity, a Nigeria-based investment platform. “Ideally, these liquidity sales used to be the next time the company fundraises, but with the current drought, companies and employees are looking at alternative options.” The founders and early team members at Moniepoint made “millions of dollars” from selling their equity at the startup in secondary transactions, according to one person familiar with those deals. Dike added that employees from Flutterwave and Andela have also sold equity in their respective companies. TechCabal has previously reported that Wasoko, the Tiger Global-backed Kenyan e-commerce startup, allowed employees with vested shares to sell their stake three times over the company’s lifetime. When Kuda Bank closed its $55 million investment co-led by Valar Ventures and Target Global in 2021, secondary sales by existing early investors made up part of the deal, one person with knowledge of the matter told TechCabal, requesting anonymity. That round valued the fintech at $500 million. Secondary markets as a viable path? Some investors see secondary markets as a vital exit path. ”We see interest from larger VC funds doing Series A, B and C, [who] want to buy out early-stage investors to simplify cap tables and exert better control in corporate governance matters,” one early-stage VC investor told TechCabal, requesting anonymity because she was not authorised to discuss private matters. The investor, a partner at one of Africa’s most active VC firms, said her firm was actively talking to growth-stage investors who want to buy out their stake in some portfolio companies. “Since you invest at pre-seed, if you can exit at Series A and Series B with the right level of returns, it can be interesting,” the VC partner said. Sometimes investors buy secondaries when it is sold at a discount to improve their internal rate of return. Internal rate of return or IRR, is one way investors measure the profitability of their investments. However, selling secondary shares “does not materially improve the company” since proceeds from secondary transactions are paid to shareholders instead of being invested in the company, Ik Kanu, founding partner at Atlantica Ventures, told TechCabal. Kanu says his firm, a pan-African VC firm that manages a $50 million fund, prefers to invest in deals where their funds are invested in helping the company grow. Like Kanu, some investors, especially development finance institutions, do not also want the funds they invest to be used to pay earlier investors. In at least one instance where a development bank is involved, early-stage investors are already having difficulty closing investment rounds that include secondary share sales by existing investors. Foreign investors with deep pockets are stepping back from writing big cheques, leaving newly formed local funds and development banks to prop up growth-stage companies. As a result, opportunities for investors to exit with secondary share sales are dwindling. Fewer secondaries mean fewer opportunities for early investors like angels to collect profit on their investments. Uwem Uwemakpan, Head of Investments at Launch Africa Ventures, believes angels should plan for 5 to 10-year scenarios. “Angels have to make investments with long time horizons in mind, rather than quick flips on secondary markets,” he said. Secondary market transactions tend to flourish in frothy markets, Kanu said. “In the present macroenvironment where
Read MoreAfrica’s motorcycle taxis on the electric horizon
Motorcycle taxis, a dominant transportation force in Africa, have substantial potential for electrification as electric two- and three-wheelers gain traction across the continent. These insights stem from a recently launched UNEP report focusing on the state of global electric two- and three-wheelers in emerging markets. At a virtual report launch on Wednesday, January 10, Tom Courtright, the Research Director at Africa e-Mobility Alliance, who is also the lead researcher for the African region in the report, delved into the underlying electrification potential of two-wheelers in Africa. “We expect commercial two-wheelers, the motorcycle taxi segment, to be particularly dominant,” he explained during the launch. Reflecting a global trend, the past three decades have witnessed a surge in the number of Internal Combustion Engine (ICE) motorcycles across Africa, reaching an estimated 27 million two and three-wheelers. However, 99% of these vehicles still rely on traditional ICE technology. While two-wheelers are relatively scarce in some markets, such as Botswana, their adaptation to commercial taxi services, especially in high-density urban areas, has fueled their ascent in most regions. Data from the UNEP reveals that in the East African Community, for instnce, encompassing Kenya, Uganda, Tanzania, Rwanda, and Burundi, up to 5 million motorcycle taxis are operational. The confluence of factors, including an increasing abundance of two-wheelers, lower electrification costs, and relatively high efficiency, positions electric two-wheelers as a high-potential segment for electrification. Notably, the cost constraints associated with remodelling four-wheelers underscore the pivotal role that two and three-wheelers can play in kick-starting a massive transformation towards cleaner alternatives in public transit. According to the International Energy Agency, conversion costs for a four-wheeler in Africa could cost between US$25,000 and US$45,000 per vehicle depending on the car model. Conversion for motorcycles can cost less than US $1000 according to Roam, a Nairobi-based e-motorcycle manufacturer. However, despite the immense underlying potential for two and three-wheelers, Courtright explained that “tax incentives are critical here” to realize this potential. Beyond two-wheelers, certain markets exhibit significant potential for mass deployment of electric three-wheelers. “There is a large space to play for some of the three-wheelers in certain places like Somalia and northern Nigeria,” he explained. Despite these prospects, the researchers identify key challenges hindering the sector’s full-scale expansion, such as grid infrastructure limitations in rural areas, high capital costs, and delays in the deployment of favorable models by Asian manufacturing giants. Financing and investment issues in Africa, with high costs and rates, present additional hurdles for widespread adoption. “There’s also a lot of issues with financing and investment rates in Africa. Investment financing is often costly. For a company it’s at least 10–12% a year… For a user, the financing for a lot of these vehicles can be 30–50% a year which is quite high,” he added. Looking ahead, researchers project that, beyond the opportunities in commercial two-wheelers, battery swapping could emerge as a noteworthy trend on the continent. Notably, the industry is already experiencing rapid growth, with startups like Spiro and Ampersand making strides in the electric two- and three-wheeler market. In fact, despite less than 1% of two- and three-wheelers currently being electric in Africa, more than 60 startups are actively working to propel the industry forward. Other ongoing developments that will shape future trends include the adaptation of Asian products for the African market, with lead-acid battery-powered two- and three-wheelers designed for personal use and making early debuts in various countries. Additionally, the presence of significant natural gas reserves in some African countries, such as Tanzania, is prompting a reconsideration of conventional two- and three-wheeler models. Researchers highlight concerted efforts to encourage the use of compressed natural gas (CNG), liquified petroleum gas (LPG), or a combination of both in three-wheelers across these markets. “Africa still has a lot of economic growth ahead of it. We expect the growth of two- and three-wheelers to continue into the foreseeable future,” he concluded.
Read MoreMultiChoice has big ambitions for its Showmax 2.0 relaunch
This week, MultiChoice-owned streaming platform Showmax unveiled the content slate for the revamped version of “Showmax 2.0”. Due to launch in February, Showmax will feature 1,300 hours of original African content and the continent’s first standalone Premier League mobile streaming plan. With the relaunch, Showmax will build on the current momentum, which has seen it eclipse Netflix as the continent’s leading platform. The success of Showmax 2.0 will also bode well for parent company MultiChoice, which has been fighting off a plummeting share price, investment write-downs, market exits and the decline in subscribers of its bread-and-better service DStv. The pan-African broadcaster has invested heavily in Showmax 2.0. Announcing its end-of-year financial results in March 2023, MultiChoice stated that it would withhold dividends from shareholders to pour cash into the Showmax relaunch. The company also announced a further R500 million (~$27 million) investment into the relaunch in November 2023. “With subscriptions falling flat on their main offering (DSTV), streaming has picked up for them and everyone else,” Jimmy Moyaha, a Johannesburg-based markets analyst, told TechCabal. “Consumer demand for affordable, quality services will play a key role in the business’s success.” MultiChoice putting all eggs into Showmax MultiChoice has publicly stated its ambitious goals for the streaming service. It wants to make Showmax the biggest streaming platform on the continent, forecasting $1 billion in revenue in five years. Multichoice aims to have 50 million Showmax subscribers in the next five years, a 3,700% increase from its current 1.8 million subscriber count. Showmax still has a long way to go before it can translate the subscriber growth momentum into positive bottom-line figures. According to the market analysis publication Daily Investor, although Showmax had revenues in the region of R500 million (~$27 million) in the first six months of MultiChoice’s 2024 financial year, between November 2022 and November 2023, the service recorded a net loss of R1.41 billion (~$75 million), translating to a net loss margin of 144%. “Consumer demand for affordable, quality services is going to play a key role in the success of the Showmax” said Moyaha.
Read More
👨🏿🚀TechCabal Daily – Seedstars’ $30 million fruit
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية TGIF Safaricom is paying for its time. Literally. To make up for M-Pesa’s three-hour downtime on Tuesday which surprised everyone including regulators, customers were given cashback or airtime tokens ranging from KES20–KES100. If you didn’t get anything, you need to up your M-Pesa game so you too can reap the rewards of a telecom currying favour from probing regulators. In today’s edition Police identify more suspects in Patricia hack Amazon cuts down its Prime Video & MGM teams Three Nigerian banks get new board members EIB Global makes third Africa venture investment Funding tracker The World Wide Web3 Job Openings Cybersecurity Police nab 7 suspects linked to Patricia’s hack The Nigerian Police Force (NPF) has identified seven suspects who reportedly stole ₦142.8 million ($155,734) from fintech Patricia. If this sounds familiar, it’s because Patricia has been in the news for quite some time now. In May 2023, we revealed that the Nigerian fintech suffered a hack in 2022 which cost it $2 million in customer funds. The hack led to several customers being unable to withdraw funds. Patricia then tried several measures to placate its understandably angry users, including a botched app relaunch, a stablecoin backed by the dollar, and fundraising. In November the NPF arrested gubernatorial candidate William Bonse for the hack. According to the police, Bonse admitted his involvement in diverting ₦607 million ($760,000) of Patricia’s funds to his account. New developments: Techpoint reports that six more suspects, including a special assistant to a Nigerian governor, have been apprehended, while a seventh remains at large. Meanwhile, Patricia might still be struggling to repay its customers. CEO Hanu Fejiro had previously said customers would start receiving payments in batches on November 20, 2023, but it appears the process has been slow. Access payments with Moniepoint Moniepoint has made it simple for your business to access payments while providing access to credit and other business tools. Open an account today here. Global News Amazon cuts down its Prime Video & MGM teams Image Source: Innovation Village Heads up, streaming fans! Amazon is giving Prime Video and MGM a makeover, and that unfortunately means saying goodbye to some folks. The tech company is laying off hundreds of employees across Prime Video and the recently acquired Metro-Goldwyn-Mayer (MGM) Studios, because it wants to focus on creating high-impact content. This isn’t Amazon’s first rodeo when it comes to layoffs. Last year, the company laid off over 27,000 employees. In this round Twitch, Amazon’s live-streaming site, is also preparing to cut off 35% of its staff, after several top executives left the company in the final months of 2023. Amazon isn’t alone: Beyond Amazon, the broader streaming landscape is grappling with economic headwinds, prompting layoffs at industry giants like Disney and Warner Bros. Even tech behemoth Google isn’t immune; on Wednesday, it reportedly cut 1,000 employees from its voice assistant, augmented reality hardware, and engineering teams. This is in addition to the 12,000 let go in January 2023 and further cuts in its recruitment division last September. Why the persistent layoffs? Layoffs have been steady across the global ecosystem since 2022, with about 500,000 employees laid off since. The big question now is if companies should still be blaming these layoffs on the economic downturn, especially when profitable companies do it too. For context, Amazon’s profits more than doubled in 2023. These moves point to underlying factors like AI or a shift. This isn’t just about weathering the economic storm, it’s about asking if these layoffs are a smart play or just a quick cash grab with some nasty long-term side effects. Banking CBN appoints new board members for Nigerian banks Nigeria’s apex bank has appointed new board members for the three commercial banks whose boards it dissolved on Wednesday. Why the overhaul? The Central Bank of Nigeria (CBN) dissolved the board of directors of Union, Keystone and Polaris banks citing regulatory non-compliance and corporate governance failure. The dissolution and replacement of board members comes weeks after Jim Obazee’s investigation into the Central Bank under former Governor Godwin Emefiele’s alleged questionable bank acquisitions. Obazee’s report claims Emefiele used proxies to purchase these banks without evidence of payment. Who are the new appointees? Yetunde Oni takes over the helm of affairs at Union Bank alongside Mannir Ubani Ringim, the bank’s new executive director. Hassan Imam will head KeystoneBank as CEO, while Chioma A. Mang will play the role of Keystone’s executive director. Lawal Mudathir Omokayode Akintola will now lead Polaris Bank as CEO, and Chris Ofikulu will be its executive director. Lights out: The CBN appears to be increasing scrutiny and tightening regulatory controls over commercial banks since the appointment of its current governor, Yemi Cardoso. However, the recent dissolution of commercial bank board members is not a first in the country. In 2016, the CBN sacked the board of directors at Skye Bank for a failure to meet the regulated capital adequacy ratio, a measure of the bank’s capacity to handle financial risks. Secure payment gateway for your business Fincra payment gateway enables you to easily collect Naira payments as a business; you can collect payments in minutes through cards, bank transfers and PayAttitude. Create a free account and start collecting NGN payments with Fincra. Funding Seedstars Africa Ventures secures $30 million from EIB Global Image source: EIB Seedstars Africa Ventures, a pan-African venture capital firm, has secured a $30 million investment from EIB Global, an arm of the European Investment Bank. Maxime Bouan, Tamim El Zein, and Bruce Nsereko Lule launched the Seedstars Africa Ventures I fund in 2020, aiming to raise between $80 million and $100 million. They’ve already partnered with LBO France and Seedstars, secured $8 million from LBO France, and invested in companies like Poa Internet, Beacon, Shamba Pride, and Bizao. This new injection from the European Investment Bank adds even more fuel to their mission. Here’s what it means for African startups: Startups can
Read More